This is an R21 proposal to study the treatment of acute hepatitis C infection in injection drug users. Hepatitis C is one of the major causes of morbidity and mortality in injection drug users with an estimated 40,000 acute infections per year. Chronically infected injection drug users serve as the main source of new infections to the general population. The main hypotheses are that treatment of acute hepatitis C in injection drug users with pegylated interferon is associated with high sustained viral clearance rates, high adherence rates, and low reinfection rates. A randomized, controlled clinical trial of weekly injections of pegylated interferon for 24 weeks will be conducted in forty injection drug users with new antibody to hepatitis C. The control group will be followed for 24 weeks with observation and then be offered standard one year of therapy with interferon. All participants will be evaluated for depression and provided with antidepressant medication as required. Subjects for this study will be referred from an ongoing prospective cohort of injection drug users followed for incident HIV and hepatitis C infections. Specific Aim 1 is to compare the sustained viral clearance rate in the treatment group (24 weeks after the last interferon dose) to the control group (24 weeks after enrollment). Specific Aim 2 will determine the adherence rate to the weekly injections in the treated group using supervised weekly injections, experienced clinical staff, and prompt management of side effects to interferon, particularly depression. Specific Aim 3 will use molecular sequencing to determine the reinfection rate in subjects who develop persistent or recurrent viremia. This project will demonstrate whether antiviral treatment of acute hepatitis C in injection drug users is efficacious and feasible. The results of the study may define a new standard of care for screening and treatment of acute hepatitis C in injection drug users and has important implications for reducing the prevalence of chronic hepatitis C in the US population.